Deadline approaches to file new mandatory report with Treasury Department

U.S. businesses created by the filing of a document with a Secretary of State before 2024 have until the end of 2024 to file a Beneficial Ownership Information (BOI) report to comply with the federal Corporate Transparency Act (CTA). Those businesses and other Reporting Companies, as defined under the CTA, which do not comply face hefty fines and potential jail time.

The CTA went into effect on Jan. 1 to combat illegal activity like money laundering and tax fraud. All domestic businesses created by the filing of a document with any Secretary of State office will need to file the BOI with the U.S. Treasury’s Financial Crimes and Enforcement Network (FinCEN) by Jan. 1, 2025. There are some exemptions for large operating companies that meet a series of criteria as well as 501c3 nonprofits and businesses in industries that are already heavily regulated.

“Through the CTA, the U.S. government is essentially trying to ensure no U.S. business is operating as a shell corporation,” said Lavelle Law attorney Frank Portera who manages the firm’s Corporate Compliance Practice Group. “By creating a database of beneficial owners of U.S. businesses, it will become easier to track and put a stop to that type of illegal activity.”

The CTA establishes a filing requirement in which companies must conduct a multistep analysis to first see whether the new law applies to them and then determine who should be listed as beneficial owners and company applicants. Determining who is a beneficial owner may be challenging to navigate without the help of an experienced attorney.

“Trying to determine beneficial owners of an organization can be difficult because that can change over time,” Portera explained.

Reporting Companies that do not file their BOI by Jan. 1 could face substantial penalties, including a $500 per day fine and criminal fines up to $10,000 and two years in prison.

Though businesses only need to submit a BOI once, they may need to update it if the company’s beneficial owners change.

For business owners seeking assistance filing their BOI, Lavelle Law offers a $149 flat fee for filing the BOI.

For information about Lavelle Law and how the firm can assist with Corporate Transparency Act compliance, visit www.lavellelaw.com.

Lavelle Law maintains offices in Schaumburg and downtown Chicago. The firm was founded in 1989 as a single attorney practice with an emphasis on tax law. The firm has added more than a dozen practice groups including Estate Planning, Business Law, Litigation, Divorce and Family Law, Commercial and Residential Real Estate, and Law Practice Consulting. The firm has received numerous awards and commendations for its business success, its commitment to ethics, national recognition for its pro bono services, and multiple acknowledgments of the charitable work it does in its local communities.

For more information, visit www.lavellelaw.com or follow Lavelle Law on Twitter, Facebook, Instagram and LinkedIn.